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Here's Why DraftKings (DKNG) Fell More Than Broader Market
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In the latest close session, DraftKings (DKNG - Free Report) was down 7.42% at $19.59. This change lagged the S&P 500's 0.17% loss on the day. On the other hand, the Dow registered a loss of 0.26%, and the technology-centric Nasdaq decreased by 0.09%.
The company's stock has dropped by 12.89% in the past month, falling short of the Consumer Discretionary sector's loss of 8.3% and the S&P 500's loss of 0.24%.
The investment community will be paying close attention to the earnings performance of DraftKings in its upcoming release. On that day, DraftKings is projected to report earnings of -$0.1 per share, which would represent year-over-year growth of 61.54%. Simultaneously, our latest consensus estimate expects the revenue to be $1.44 billion, showing a 25.53% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates project earnings of $0.9 per share and a revenue of $6.72 billion, demonstrating changes of +36.36% and +11%, respectively, from the preceding year.
It's also important for investors to be aware of any recent modifications to analyst estimates for DraftKings. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 22.73% fall in the Zacks Consensus EPS estimate. Currently, DraftKings is carrying a Zacks Rank of #4 (Sell).
In the context of valuation, DraftKings is at present trading with a Forward P/E ratio of 23.51. Its industry sports an average Forward P/E of 15.25, so one might conclude that DraftKings is trading at a premium comparatively.
We can also see that DKNG currently has a PEG ratio of 0.94. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Gaming industry stood at 1.05 at the close of the market yesterday.
The Gaming industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 174, which puts it in the bottom 30% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
View the Zacks #1 Rank List
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Here's Why DraftKings (DKNG) Fell More Than Broader Market
In the latest close session, DraftKings (DKNG - Free Report) was down 7.42% at $19.59. This change lagged the S&P 500's 0.17% loss on the day. On the other hand, the Dow registered a loss of 0.26%, and the technology-centric Nasdaq decreased by 0.09%.
The company's stock has dropped by 12.89% in the past month, falling short of the Consumer Discretionary sector's loss of 8.3% and the S&P 500's loss of 0.24%.
The investment community will be paying close attention to the earnings performance of DraftKings in its upcoming release. On that day, DraftKings is projected to report earnings of -$0.1 per share, which would represent year-over-year growth of 61.54%. Simultaneously, our latest consensus estimate expects the revenue to be $1.44 billion, showing a 25.53% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates project earnings of $0.9 per share and a revenue of $6.72 billion, demonstrating changes of +36.36% and +11%, respectively, from the preceding year.
It's also important for investors to be aware of any recent modifications to analyst estimates for DraftKings. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 22.73% fall in the Zacks Consensus EPS estimate. Currently, DraftKings is carrying a Zacks Rank of #4 (Sell).
In the context of valuation, DraftKings is at present trading with a Forward P/E ratio of 23.51. Its industry sports an average Forward P/E of 15.25, so one might conclude that DraftKings is trading at a premium comparatively.
We can also see that DKNG currently has a PEG ratio of 0.94. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Gaming industry stood at 1.05 at the close of the market yesterday.
The Gaming industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 174, which puts it in the bottom 30% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.